6 Chapter Highlights 4. lump sum tax or subsidy -amount of tax or subsidy is independent of the consumers choices. Also called a head tax or a poll tax 5. rationing -can't consume more than a certain amount of some good J. Example -food stamps 1. before 1979 was an ad valorem subsidy on food a)paid a certain amount of money to get food stamps which were worth more than they cost b)some rationing component- could only buy a maximum amount of 2. after 1979 got a straight lump-sum grant of food coupons. Not the san as a pure lump-sum grant since could only spend the coupons on food e6 Chapter Highlights 4. lump sum tax or subsidy — amount of tax or subsidy is independent of the consumer’s choices. Also called a head tax or a poll tax 5. rationing — can’t consume more than a certain amount of some good J. Example — food stamps 1. before 1979 was an ad valorem subsidy on food a) paid a certain amount of money to get food stamps which were worth more than they cost b) some rationing component — could only buy a maximum amount of food stamps 2. after 1979 got a straight lump-sum grant of food coupons. Not the same as a pure lump-sum grant since could only spend the coupons on food